December 2009, Auto Dealer Today - WebXclusive
Riding out the rough waves of the economy hasn’t been a breeze for anyone, but Phil Smith Acura in Pompano Beach, Fla., seems to be weathering the storm quite nicely. The store, which has been a part of Phil Smith Automotive Group for three years, focuses intently on attracting and engaging customers online. In fact, thanks to thedealership’s efforts online, approximately 70 percent of it’s business is Internet-based.
When General Manager Jim Behar moved from another store in the Phil Smith Automotive Group to manage the Acura store, one of the first things he did was establish a business development center, which was initially no more than a single person and a computer room. The important thing at that time was to focus on establishing sound processes for handling leads and to make certain the staff was held accountable for lead follow-up.
Refocusing the dealership’s marketing and advertising efforts was another high priority. “They were advertising in the newspaper and doing direct mail the old-fashioned way, which in my opinion doesn’t really work a whole lot anymore,” said Behar. “Everybody goes to a computer today. If you want to know something, you go to Google and type it in.” Presently, nearly all of the dealership’s marketing and advertising, aside from a few used car ads in the local newspaper, is done online. In addition to the dealership’s main Web site, the dealership also employs microsites for each new car model the store carries, giving the store even more of an edge in Internet search engines
The use of micrsosites and optimization of the main site have likely been part of what has helped the store stay consistent in new car sales during a time when other new car franchise dealerships have been relying more heavily on used vehicle sales. “Our [new car] business has remained pretty much steady,” said Behar. “We’re a small store in Pompano Beach, so we’ll sell 50 new cars a month, and we just maintain that.”
The government’s “Cash for Clunkers” program, he noted, had nearly no impact on new car sales since the store only carried one model that would fit the program. That fact has actually worked in the store’s favor. For the month of September, Behar said the dealership would still come through with at least 40 new vehicle sales while “everybody else in the market’s pretty much suffering” due to a lack of inventory. ,” he pointed out. “And on the flip side,” he continued, “[September] is when we were able to get some more inventory from Acura, so now our new car inventory is building up and I think … we should do very well.”
In addition to holding steady on new car sales, Behar said that in recent months the dealership has been able to greatly increase its used car business, both in terms of volume and gross per unit. Starting in June Phil Smith Acura has been seeing about a $5,000 increase in overall gross profit each month He credits the increase in pre-owned sales to a new online marketing tool he started utilizing in May. The new program, iTurn, is offered by Valuinsight, the same company whose inventory control system Behar utilizes for the dealership. He described the iTurn product as pay-per-click advertising for used vehicles. If someone within a specified geographic radius searches online for a certain vehicle and Phil Smith Acura has that vehicle in stock, iTurn makes sure that vehicle turns up in one of the top positions of the search results.
“That is what helped us increase our used cars quite a bit,” said Behar. He added that the company monitors daily activity and sends him reports showing which used cars are getting the highest number of clicks. He said used cars also continue to list used inventory on sites like craigslist and eBay. The store is currently averaging 20 to 25 used vehicle sales per month.
Of course, any online marketing tool is only useful if solid lead-handling processes are in place. Behar’s emphasis on efficient lead management has proved to be the key to the operation, which became evident when the market really began to slide about a year ago. The dealership was forced to cut expenses, and Behar had to scale back his staff from 60 employees to 38. Some BDC employees were let go and instead of maintaining the full-blown BDC he had developed, Behar opted to combine the BDC and Internet department.
Rather than having business development representatives handle leads and set appointments for the sales staff, Behar tapped a handful of veteran salespeople who had previously been partnered up with the BDRs to begin fielding incoming leads. “They were given the opportunity to go ahead and handle it from start to finish, as opposed to just picking it up once the people walked in the door,” said Behar. All salespeople now work on rotation in the Internet department; each person has a set shift and gets to work whatever leads come in during that time. The BDC director/Internet manager monitors online activity to ensure all leads are followed up on.
Immediate response to leads is of paramount importance to Behar. With the prevalence of the Internet in the everyday life of the average consumer, shoppers have become accustomed to being able to get online and immediately find what they’re looking for. It’s important to strike while the iron is hot, which is why Phil Smith Acura utilizes ActivEngage live chat on its Web sites.
Behar said he’s found that shoppers are more inclined to start chatting with someone while they’re looking instead of trying to find a button to click to get more information. “The whole idea is to get back to them while they’re still sitting in front of the computer,” he stated. “[Immediate response] is the number-one thing.” Chat transcripts go directly into the dealership’s CRM system, and the customer is contacted within minutes. Behar said ActivEngage also has a tool that allows him and his BDC director/Internet manager to monitor Web site traffic and observe from their desks where visitors are on the site at any given time.
The immediate-response philosophy applies to more than just sales leads. “The same philosophies carry through the whole store,” said Behar. The dealership’s site allows customers to set service appointments and even purchase parts online. Everything is designed to be interactive, right down to the e-mail blasts. If an e-mail is sent out with an oil change special, for example, customers need only click on the special inside the e-mail to set up an appointment. They will generally receive a call or e-mail back from a service writer within five minutes to confirm the appointment.
Behar said that Phil Smith Acura is a relatively small store and does not occupy a busy intersection like some other dealerships, which makes engaging customers online all the more important. “[Customers will] do their homework before they come into the store, so if we can get in front of them while they’re doing their homework and … establish a relationship with them immediately, we can get them in the store.” He added, “The whole key is to set the appointment …We close 50 percent of the people we can get in the door.”
Training is an essential part of maintaining appropriate appointment-setting and closing ratios. “We train constantly. We train on a daily basis,” said Behar. “We do a lot of online training with some of our vendors, our CRM tools, and then we do a lot of in-house reviewing every morning.”
Behar reiterated, “I’m a nut for immediate response. If I go in [the CRM system] and I don’t see that there’s a salesperson’s name with notes on the lead, then we need to counsel with them and find out why it didn’t happen.” When the switch was made from a full BDC to a combined department where salespeople handled the incoming leads and appointment-setting, training became even more important. “We record all our calls to review with the salespeople the following day, and if they fumble or don’t use the phone properly, they’re taken off of the phone until they’re retrained. And then they’re put back on.”
However, phone skills and lead follow-up are not the only things covered in training. Basics like product knowledge and presentation are covered regularly. Daily training addresses a range of topics, and in addition to the regular training sessions, Behar said once a week a salesperson makes a presentation. The salespeople can choose any topic they wish, like a new model, a used car, or even some feature of a particular model like Bluetooth integration or the computer hard drive in the new Acura TL. “They make a presentation on anything, then we grade them and we buy them lunch,” he said. This kind of training keeps everyone on their toes. “Everybody’s always trying to think of something new. It’s very simple,” he said.
“Around here, failure is not an option.” True to his word, Phil Smith Acura is holding steady. Behar is making sure all employees stay on top of their game, so the dealership remains poised to take full advantage of the market when things begin to rebound. “Three years ago, the market was there, the store was doing very well with new vehicle sales and the fixed operation were doing well too, but you can’t compare this market to that market,” he said. “You just have to get it stable and keep it steady and get everybody in line, and then when it does get better, we’re going to be dangerous.”
Vol. 6, Issue 11